'Improving access to capital for the nation's innovative industries will lead to new jobs, higher growth, and better commercialisation of Australian ideas in Australia.
'In addition to the general boost to business from the reduction in the corporate tax rate to 30%, the AT&T and other innovative industries will receive an additional important boost through the halving of the Capital Gains Tax (CAT) rate.
'Australia's innovative industries have had to endure an uncompetitive capital gains tax system for too long. As a result, too often Australia missed out on high value added exports and jobs, ideas were not commercialised, intellectual property left the country, and entrepreneurial activity in the information economy was constrained.
'The Government's reforms will provide Australia with an internationally competitive tax system - and the real potential of our innovative industries, including IT, telecommunications and the internet, will be unleashed.'
Senator Alston said that the reforms to capital gains tax will mean that individuals will pay no more than 24.25% and superannuating funds no more than 10% tax on nominal capital gains - thus making Australia's CGT rate internationally competitive.
Pension funds from designated countries will also now be able to invest tax-free in Australia's early and expansion stage venture capital market - matching the treatment they receive at home. Australian superannuation funds will receive a similar benefit in relation to investments made through Pooled Development Funds.
The reforms include 'rollover relief' so that no CGT liability will arise where there is an exchange of interests in companies or fixed trusts because of a takeover (subject to certain requirements such as the acquiring entity owning at least 80% of the voting interests of the target entity.) This measure will enable the restructuring of rapidly growing innovative businesses, and means Australian companies will face similar tax treatment to that faced by their US and UK counterparts.
'In a world where investors have many choices about where to put their capital, this is a vital breakthrough,' Senator Alston said.
